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2017 (2) TMI 1343 - AT - Central ExciseLiability of duty - clinker manufactured by the appellant - clinker used in the manufacture of duty exempted cement and such cement cleared to SEZ - Held that - Section 51 of the SEZ Act, 2005 has overriding provision stating that notwithstanding anything contained in any other law for the time being in force supplies to the SEZ shall be exempt from the levy of duty - Further, section 2 (m) of the SEZ Act, 2005 also has enacted that supplies to the SEZ by a DTA shall be treated as export - there shall be no levy in respect of cements cleared to SEZ - appeal allowed.
Issues:
Allegation of using clinker in duty exempted cement for SEZ clearance Analysis: The judgment deals with the issue of whether the appellant, by using clinker in the manufacture of duty exempted cement cleared to a Special Economic Zone (SEZ), would be liable to duty. The Notification No. 67/950CE dated 16/03/1995 exempts goods specified in column 2 of the Table when manufactured in a factory and used within the factory of production or in relation to the manufacture of final products specified in column 3 of the Table. The clinker manufactured by the appellant falls under column 2 of the Table and is not liable to duty as per the notification. Regarding the final goods falling under column 3 of the Table, which are manufactured using the exempted intermediate goods, i.e., clinker, it is highlighted that Section 51 of the SEZ Act, 2005, contains an overriding provision exempting supplies to SEZ from the levy of duty. Furthermore, Section 2(m) of the SEZ Act, 2005, deems supplies to SEZ by a Domestic Tariff Area (DTA) as exports. Consequently, there would be no duty levy on the cement cleared to SEZ as per the provisions of the SEZ Act. In conclusion, the appellate tribunal allowed the appeal, emphasizing that the clinker manufactured by the appellant for the production of duty exempted cement cleared to SEZ does not attract duty liability based on the provisions of the SEZ Act and the relevant notification.
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